SAN FRANCISCO (MarketWatch) -- Crude-oil futures climbed to a high of $75 per barrel Friday for the first time ever for a front-month contract on concerns about tensions surrounding Iran's nuclear activities, violence in Nigeria, and tight U.S. supplies of unleaded gasoline. June crude was last up $1.26, or 1.7%, at $74.95 per barrel. "We often see this sort of short covering in a record-setting bull market ahead of a weekend, since nobody is sure where we may be Monday," said trader Kevin Kerr, who is also editor of MarketWatch's Global Resources Trader.

I'm pretty good with economics, but I can't figure out how a tight "unleaded gasoline" supply in the U.S. effects Crude Oil prices. The supply problem is because we are cutting the refineries over to summer blend.

Don't we really just care what the "crude oil inventory" is when deciding how it effect oil prices? Often, when we have this spring gasoline effect, our oil inventory goes up because of the backlog.

Amen. And I don't care what anyone here says, if the prices continue at the level -- or go even higher -- we will see Bush's approval rating drop into the 20s. It doesn't matter if it's actually his fault or not.

1. Buy Oil stocks (done-- just the last two months covered my gas @$4/gallon for this and next year) 2. Stock Options: Straddle leaning long (working on it) 3. If it goes to $75 (absurd) short oil futures (waiting)

19
posted on 04/21/2006 10:55:56 AM PDT
by LambSlave
(Who is John Galt?)

The "speculators" are over-extended. A "speculator" had to buy it at $74 for it to go to $74.50. Those who bought at $60 are mostly out of the market now. I think they recent rise is short covering. The rookies are buying at the top.

Bubbles are built on fear and greed. The oil market is built on both.

"Oil will never go down." Sounds like we're near the top to me.

I remember "Qualcomm will go to $1000." The market started tanking the next day.

23
posted on 04/21/2006 10:58:35 AM PDT
by rightinthemiddle
(Islamic Terrorists, the Mainstream Media and the Democrat Party Have the Same Goals in Iraq.)

We are so late to the game... We could put a man on the moon forty years ago, but we can't find a fuel alternative to oil? I don't want to dam up the free market, but enough is enough. We need to start cutting back.

Any bubble in the price of oil that busts won't hurt the production/supply chain. They insulate themselves by immediately raising daily prices at the pump to reflect the daily price of oil, gas, etc. In fact, they seem much more willing to raise it immediately than they do to lower it when the market goes down.

33
posted on 04/21/2006 11:05:21 AM PDT
by xzins
(Retired Army Chaplain and Proud of It. Supporting our Troops Means Praying for them to Win!)

In fact, they seem much more willing to raise it immediately than they do to lower it when the market goes down.

That's mandated in Wisconsin. Under our absurd minimum markup law (supported by DemonRAT governor Jim "Craps" Doyle (WEAC/Potawatomi-For Sale) and various RINOS and RepublicRATs), gas stations must tack on the higher of 6% above what they paid for the gas in their tanks or 9.18% above what that day's average terminal price is.

Rockinright wrote:At this point, I don't care if it's price gouging, market forces, lack of refining capacity...or a combination of all of the above...all I know is I am sick of paying $3 a gallon for gas...

$4.00 per gallon gas (it's already $3.35 and climbing at some places around here) and shortages to boot, are going to lead to a Democratic takeover of Congress this November.

It DOESN'T MATTER how much rhetoric a few Freepers are going to extoll regarding the concept of "free markets". It doesn't matter one whit

With ever-increasing gas prices that literally zoom up nightly, facts becomes useless. What matters more is "public perception".

And right now the perception is that the prices and shortages are due - at least in part - to the greed of the energy producers (look that that Exxon retirement package!), speculators who run rampant and unregulated, and the inability (or unwillingness) of the President and his party to do anything about it.

For example, the current "ethanol imbroglio" could be ended immediately - by an executive order suspending the EPA-mandated ethanol switchover requirements. After the executive order was in place, the Repbulican-controlled Congress (our side still "controls" Congress, right?) could expedite legislation to restrict or perhaps end outright "botique blends" of gasoline in favor of a few "regional" blends that can be produced more efficiently and cheaply, reducing price-pressure on refinery products and maximizing production "throughput" at our refineries.

My bet is the Congress and President will do next-to-nothing, or just plain _nothing_ as prices zoom up and actual shortages ensue (as they are occuring RIGHT NOW). Of course, President Bush will take a moment to express his "concern" about high gas prices, and then go on to other business (derisive snort).

Another $25, we get to $100 a barrel, which is supposed to be some magic number. At that point, it is entirely feasible to mine the ocean floor for Methane Hydrate, a much more abundant storehouse of energy than all the petroleum, coal and natural gas reserves known anywhere in the world.

Just breaking open the seams of coal that underlie many parts of the US, and using the Fischer-Tropsch process, we can produce more fuel stocks than we are likely to import from foreign sources for the next fifty years. In a word, self-sufficiency.

Designs for nuclear power generation plants, using technology developed since the last round of plants were built in this country some thirty years ago, should become one of our crash goals, starting a new plant every two weeks for the next five years, and getting them on line within three years of beginning construction.

This is a "price control" violation of a free market. Many think of price controls as an effort to keep the price down. But, forcing the price higher via government mandate is still a price control and a distortion of a free market.

48
posted on 04/21/2006 11:14:44 AM PDT
by xzins
(Retired Army Chaplain and Proud of It. Supporting our Troops Means Praying for them to Win!)

They insulate themselves by immediately raising daily prices at the pump to reflect the daily price of oil, gas, etc. In fact, they seem much more willing to raise it immediately than they do to lower it when the market goes down.

They did a story on the local news and asked a gas station owner how he sets the price for gas. He said he gets in his car at 5:00am, drives up the road to big Shell/Exxon/Mobil/BP corner of gas stations, and sets his price $0.01 less than the cheapest price.

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